By Andria Cheng

With the death toll from last month’s garment building collapse in Bangladesh topping 1,100, major apparel retailers H&M and Zara parent Inditex said on Monday they would sign a legally binding agreement to shoulder the costs of fire and building safety improvements in the South Asian country, raising pressure for others including Wal-Mart Stores Inc.
/quotes/zigman/245476/quotes/nls/wmtWMT and Gap Inc.
/quotes/zigman/227242/quotes/nls/gpsGPS to follow suit.

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Bangladeshi rescuers retrieve garment worker Reshma from the rubble of the collapsed building on May 10.

Swedish fashion chain H&M said it will support the five-year Accord on Fire and Building Safety in Bangladesh, initiated by international and Bangladeshi labor unions and backed by several non-profit worker rights groups including Washington-based Worker Rights Consortium. H&M’s endorsement of the accord is crucial because it’s the largest apparel buyer in the country, Worker Rights Consortium, or WRC, told MarketWatch, adding it estimated Zara to be the third-largest buyer. It said Dutch retailer C&A and U.K-based retailer Primark have both also signed on.

“It’s an enormous breakthrough,” said Scott Nova, WRC’s executive director, in an interview.

Major terms of the agreement will involve companies helping to pay up to $500,000 a year each to help fund the operating costs of the program. On top of that, they’ll be responsible to help shoulder the costs of any building repairs to ensure it’s “financially feasible” for its suppliers, WRC spokeswoman Theresa Haas told MarketWatch. She said WRC estimated it would cost a total of $3 billion to renovate 5,000 factories in the country over five years.

She said Wal-Mart, which the group said is the second largest apparel buyer in Bangladesh and Gap, also a major player, have still not endorsed the accord and are conducting their own voluntary programs that she said are not “legally enforceable.”

J.C. Penney Co.
/quotes/zigman/237947/quotes/nls/jcpJCP hasn’t made a decision about whether to support the agreement as there are other proposals being developed by groups including American Apparel and Footwear Association and National Retail Federation, spokeswoman Daphne Avila said. She said Penney is actively working on changes including a policy to prohibit the use of factories within multi-use buildings.

Sears Holdings Corp.
/quotes/zigman/95136/quotes/nls/shldSHLDspokesman Howard Riefs said the retailer also has its own inspection programs and is reviewing all available options, including assessing the discussed accord.

Gap said it takes its commitment to improve working conditions very seriously. The company, which said it currently contracts with 78 factories in Bangladesh, said it was among the first global brands to take “tangible actions” in the country, including a commitment of financial support of up to $22 million. It didn’t specify what the amount was for what kind of improvements in the country. Gap also said it’s ready to sign the accord, which it described as “historic,” if a modification on how disputes are resolved in courts can be made.

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About Behind the Storefront

Behind the Storefront is a blog about all things retail. It’s aimed at investors, shoppers and anyone else with a passion for learning about what drives consumer behavior. Hosted by Andria Cheng, Behind the Storefront will cover the business, brands and shopping behavior that’s behind some of the biggest companies, and largest employers, in the world. You can reach Andria at Acheng@marketwatch.com.